Wendy's Q1 Results Top Estimates; Backs 2014 Adj. EPS View - Quick Facts

(RTTNews) - Fast food chain Wendy's Co. (WEN) said that net income for the first quarter ended March 30, 2014 was $46.3 million, compared to $2.1 million last year, an increase of $44.2 million, despite the impact of a $33.1 million year-over-year increase in income tax expense. First-quarter 2014 net income benefited from an $8.0 million year-over-year reduction in interest expense as a result of the Company's 2013 debt restructuring. Earnings per share grew to $0.12, from $0.01 in the year ago quarter.

Adjusted earnings per share were $0.07, compared to $0.03 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.05 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted EBITDA was $87.3 million, an increase of 13.0 percent compared to $77.3 million last year. The first-quarter 2014 results include a gain of $12.1 million, which includes an $8.6 million gain on the sale of restaurants and a gain on the sale of surplus properties.

Operating profit surged to $89.0 million, from $22.5 million last year. Significant items impacting first-quarter 2014 operating profit include the gain on the sale of assets, in addition to a $44.0 million net gain from the Company's system optimization initiative. Significant items affecting first-quarter 2013 operating profit include a $3.0 million facilities action charge, primarily due to the relocation of the Company's Atlanta Restaurant Support Center to Dublin.

Consolidated revenues were $523.2 million compared to $603.7 million last year. Wall Street expected revenues of $498.19 million. The decrease resulted from lost revenue following the disposition of 418 Company-operated restaurants as part of the Company's system optimization initiative, partially offset by same-restaurant sales growth, as well as increases in technical assistance fees, rental income and franchise royalties.

Company-operated same-restaurant sales increased 1.3 percent, on top of a 1.0 percent increase last year.

The company said it is on track for at least 410 new and reimaged systemwide restaurants in 2014.

For 2014, the company still expects Adjusted EBITDA of $390 million to $400 million, an increase of 6 to 9 percent compared to 2013. The Company still expects Adjusted Earnings Per Share of $0.34 to $0.36. Analysts project annual earnings per share of $0.35.

The company also reaffirmed its previous long-term outlook of high-single-digit to low-double-digit Adjusted EBITDA growth, as well as mid-teens Adjusted Earnings Per Share growth. This guidance includes the expectation for annual same-restaurant sales growth of at least 3 percent beginning in 2015.